Correlation Between Baloise Holding and Swiss Life
Can any of the company-specific risk be diversified away by investing in both Baloise Holding and Swiss Life at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Baloise Holding and Swiss Life into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Baloise Holding AG and Swiss Life Holding, you can compare the effects of market volatilities on Baloise Holding and Swiss Life and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Baloise Holding with a short position of Swiss Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baloise Holding and Swiss Life.
Diversification Opportunities for Baloise Holding and Swiss Life
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Baloise and Swiss is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Baloise Holding AG and Swiss Life Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Swiss Life Holding and Baloise Holding is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Baloise Holding AG are associated (or correlated) with Swiss Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Swiss Life Holding has no effect on the direction of Baloise Holding i.e., Baloise Holding and Swiss Life go up and down completely randomly.
Pair Corralation between Baloise Holding and Swiss Life
Assuming the 90 days trading horizon Baloise Holding AG is expected to generate 0.83 times more return on investment than Swiss Life. However, Baloise Holding AG is 1.2 times less risky than Swiss Life. It trades about 0.08 of its potential returns per unit of risk. Swiss Life Holding is currently generating about 0.05 per unit of risk. If you would invest 13,050 in Baloise Holding AG on January 30, 2024 and sell it today you would earn a total of 1,240 from holding Baloise Holding AG or generate 9.5% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Baloise Holding AG vs. Swiss Life Holding
Performance |
Timeline |
Baloise Holding AG |
Swiss Life Holding |
Baloise Holding and Swiss Life Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Baloise Holding and Swiss Life
The main advantage of trading using opposite Baloise Holding and Swiss Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baloise Holding position performs unexpectedly, Swiss Life can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Swiss Life will offset losses from the drop in Swiss Life's long position.Baloise Holding vs. Swiss Re AG | Baloise Holding vs. Swisscom AG | Baloise Holding vs. Lonza Group AG | Baloise Holding vs. Novartis AG |
Swiss Life vs. Swiss Re AG | Swiss Life vs. Swisscom AG | Swiss Life vs. Lonza Group AG | Swiss Life vs. Novartis AG |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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